Transposable elements and their remnants constitute a substantial fraction of eukaryotic genomes. Host genomes have evolved defence mechanisms, including chromatin modifications and RNA interference, to regulate transposable elements. Here we describe a genome surveillance mechanism for retrotransposons by transposase-derived centromeric protein CENP-B homologues of the fission yeast Schizosaccharomyces pombe. CENP-B homologues of S. pombe localize at and recruit histone deacetylases to silence Tf2 retrotransposons. CENP-Bs also repress solo long terminal repeats (LTRs) and LTR-associated genes. Tf2 elements are clustered into 'Tf' bodies, the organization of which depends on CENP-Bs that display discrete nuclear structures. Furthermore, CENP-Bs prevent an 'extinct' Tf1 retrotransposon from re-entering the host genome by blocking its recombination with extant Tf2, and silence and immobilize a Tf1 integrant that becomes sequestered into Tf bodies. Our results reveal a probable ancient retrotransposon surveillance pathway important for host genome integrity, and highlight potential conflicts between DNA transposons and retrotransposons, major transposable elements believed to have greatly moulded the evolution of genomes.